A Case Study of the Lower Silesian Voivodeship

Home , Legnica, Sudetes

Miscellanea Geographica – Regional Studies on Development Vol. 21 • No. 2 • 2017 • pp. 84-88 • ISSN: 2084-6118 • DOI: 10.1515/mgrsd-2017-0026

Changing the development path of a region – a case study of the Lower Silesian Voivodeship

Abstract A case study of the Lower Silesian Voivodeship is presented in this article. Klaudia Peszat1, Jacek Szlachta2 From the European Union’s perspective, Lower Silesia is an example of a less developed region; however, it is also an example of a region that has improved significantly in regards to development due to a change in its innovation model. The purpose of this article is to identify the factors 1Department of Local Development and Policy, that have had an impact on the change in the region’s development path Faculty of Geography and Regional Studies, (stimulants), as well as to indicate the weaknesses and barriers limiting University of Warsaw, Poland e-mail: [email protected] further development. This article is based on a review of the literature, statistical data analysis as well as structured, in-depth interviews that were 2Department of Regional and Spatial conducted with representatives of regional and local authorities, scientific Development, Collegium of Socio-Economics, units and business-related institutions. Recommendations for the regional Warsaw School of Economics, Poland policy of Lower Silesia have been formulated on this basis. e-mail: [email protected]

Keywords Regional development • innovation • regional development path • path dependency Received: 23 February 2017 © University of Warsaw – Faculty of Geography and Regional Studies Accepted: 21 June 2017

Introduction Attention should be paid to the significant doctrinal re- strategy. The priorities of Strategy Europe 2020 are as follows: evaluations concerning regional development that have been (1) development of the economy based on knowledge and presented in the last decade. They were related, among other innovation; (2) sustainable development; and (3) favouring an things, to the following: new economic geography (Krugman 1995; economy with a high employment rate, and ensuring high social Fujita, Krugman & Venables 2001), policy based on location (Barca 2009) and territorial coherence. This means a substantial emphasis and space of flows (Castells 1996; Castells 1997). The World Bank on actions oriented towards competitiveness, innovation and and the OECD played a key role in adapting such experiences to the R&D sector, which was also expressed in the anticipation of the framework of particular public policies (The World Bank 2009; Gill common frameworks for the implementation of regional innovation 2010; OECD 2009a; OECD 2009b); thus, a new paradigm of social and policies that were supposed to be based – according to a guide economic development has been written about. In this paradigm, developed by experts from the European Commission – on smart territorial matters have an important meaning for the shape of specialisations strategies (RIS3) (Foray et. al., 2012). development processes within particular territories (Gawlikowska- Strategy Europe 2020 has become the basis for all EU policies Hueckel & Szlachta 2014; Zaucha et. al., 2015). that are supposed to stimulate positive changes in the economy Since introducing the Delors package in 1988, the European and society of the European Union for the current decade. The Union has implemented an active regional policy oriented towards 2014–2020 European coherence policy will obviously have an social and economic coherence, which was completed in the important meaning for the efficient implementation of this strategy Lisbon Treaty with territorial coherence (Barcz 2008). A significant as it has the necessary funds and instruments. change that took place at the beginning of the twenty-first century involved shifting the priorities of regional policy from coherence Methodology to competitiveness. This was related to striving to reverse the This article describes a case study of the Lower Silesian negative megatrends in the global economy that involved erosion Voivodeship, one of five Polish regions selected for detailed of Europe’s economic position, including that of the European analysis within the research project: “Changing innovation Union. Initially, the Lisbon Strategy of 2000 served this purpose, processes models: a chance to break out of path dependency then the Renewed Lisbon Strategy of 2005, and finally the for less developed regions,” which is financed by the National Strategy Europe 2020 from 2010 (the European Commission Science Centre. The purpose of the case study was to determine 2010). The latter was accepted as the basis for all EU policies in the factors that influenced the change in Lower Silesia’s the 2020s. It underlines the current assumption that the purpose development path as well as their significance. In the first stage of the European coherence policy and other European policies of the study, statistical analyses of Eurostat and Central Statistical for 2014–2020 will be the most efficient way of implementing this Office data were carried out. These allowed the determination of

84 Miscellanea Geographica – Regional Studies on Development Vol. 21 • No. 2 • 2017 • pp. 84-88 • ISSN: 2084-6118 • DOI: 10.1515/mgrsd-2017-0026 the current level of Lower Silesian Voivodeship’s development areas, in particular those that have the status of special economic and the dynamics of the changes in the basic innovation zone (SEZ) significantly impacted the investment attractiveness indicators compared to other European regions. Then, based of the region (see Drelich-Skulska 2006; Jarczewski 2012). Lower on the conclusions of the statistical analyses and a scientific Silesia has the largest number and the greatest surface area of literature review, the comparative advantage of the region was SEZ subzones (the surface area of all investment areas in SEZs determined. In the next step, these factors were verified against exceeds 3.6 thousand hectares and nearly 370 business entities the information and opinions obtained during the individual in- have invested in the area with a declared employment level of 61 depth interviews with the main actors of the regional innovation thousand people) (the Marshall’s Office of the Lower Silesian Voivodeship system.1 Due to length limitations, in this elaboration we focus 2016). Foreign investments have contributed to the creation our attention mostly on the results of the qualitative research. of new workplaces in the region as well as to modernizing the In recent decades, with the exception of Mazovia, the Lower economy through the inflow of new technologies and knowledge. Silesian Voivodeship posted the highest increase in GDP per Here, it should be underlined that the region’s employment capita, according to purchasing power parity, of all Polish regions, structure is very beneficial (third position in the country regarding thanks to which it advanced (amongst the EU 28) from a level the share of employment in industry. 26.4%), and the industry of 46% in 1997 to 57% in 2006 and to 76% in 2014 (Central sector is characterized by the highest gross value added (GVA) Statistical Office 1999–2016). Lower Silesia was also the second per capita in the country (EUR 37.4 thousand per one employed region (after Mazovia) to reach a level exceeding 75% of the person in 2013). However, SEZs in Lower Silesia not only attract EU average regarding GDP per capita measured as purchasing manufacturing companies, but also global companies that situate power parity. Clusters’ analysis also indicated that in the twenty- their competence centres there (Hajduga 2011). first century Lower Silesia increased its innovation model by one Another important factor in the development of the Lower class (from class C to class B) (Wojnicka-Sycz 2015). The Lower Silesian Voivodeship is its scientific potential. Wrocław is a Silesian Voivodeship currently reflects the development path of significant academic and scientific centre both for Poland and strongly growing, less developed regions of the European Union. Europe. Regarding both the number of students (nearly 130 The statistical analyses indicate that, thanks to the strengthening thousand students in 2015) and the activities of its educational of potential in the field of high technologies; along with an units concerning research (29 educational units assessed increase in the population’s level of education, and an a rise in this category as A+ and A by the Ministry of Science and in employment in the science and technical sectors as well as Higher Education) it achieves high positions in comparison to selected industrial and service branches within high and medium other Polish voivodeships. It is worth noting that educational high technical areas, it was possible to change the development courses are adjusted to the regional employment market (nearly path of the region (Wojnicka-Sycz 2015). Since 2000, the region has every third graduate of a university in Lower Silesia completed been in the group that has had constant growth in terms of an engineering studies). An important element of Lower Silesia’s innovative economy and business environment (Dominiak 2014). regional innovation system is the presence of numerous pro- The changes, their direction and dynamics, indicate that the innovation and business-related institutions. Obviously, Wrocław economy of Lower Silesian Voivodeship is increasingly based on has the greatest potential in this field, as it has technological knowledge and innovation (see Korenik 2006; Skórska 2014). parks, technology transfer centres, entrepreneurship incubators, The most important factors that favoured structural changes and research and development centres – including the first RTO were described using matrixes applied in SWOT analyses. Later organization (Research and Technology Organization)2 in Poland; in the article, the potentials and weaknesses of the Lower Silesian but institutions supporting entrepreneurship and the innovation of Voivodeship are characterized (internal features of the region) as companies are also located in sub-regional cities as well as some well as opportunities and development barriers (region-related county centres. elements). Weaknesses of the Lower Silesia Voivodeship Potentials of the Lower Silesia Voivodeship The positive effects of economic modernization and One of the key factors that stimulated the development of changes in the innovation process models are, unfortunately, Lower Silesia was an inflow of foreign direct investment into the not apparent in all parts of the region to the same extent. Within region. From the beginning of the 1990s, due to its beneficial the voivodeship there are both strong growth poles, such as the geographical location the Lower Silesia Voivodeship effectively Wrocław metropolitan area and the Legnica-Głogów Copper attracted foreign capital. After Poland joined the European Union District, as well as areas in which negative social and economic in 2004, the inflow of foreign direct investment became even phenomena accumulate; this results from both peripheral more dynamic. The voivodeship has had noted high positions in locations (Kłodzko region, mountain areas, and north-eastern investment attractiveness rankings for Polish regions for many regions of the voivodeship) as well as economic transformation years (in the last IBnGR rating, third position). Factors such as processes (e.g. Wałbrzych agglomeration). Social and economic economic and social infrastructure, transport availability and most degradation and a simultaneous lack of appropriate quality of all, activities directed at attracting investors, are assessed communication connections spatially that isolates these parts of highly (Tarkowski 2015). In the ranking, it is understood that, a high the regions, means that they are subject to strong depopulation number of investment offers, a distinguished Regional Investor processes. Wałbrzych constitutes a clear example as it has, Assistance Centre, an above-average intensity of activities since the beginning of the 1990s, lost 25 thousand residents, a distributing information, but also that local and regional authorities decrease of 17%, and what is more challenging, the demographic as well as residents are open to new investors, all have an forecast for this part of the voivodeship is not optimistic (Górecka, important meaning. Undoubtedly, the development of investment Szmytkie 2015). Another of Lower Silesia’s weaknesses is the lack of continuity 1 In total, 11 in-depth interviews were conducted, including interviews with in development policies, which results from a large variability in representatives of the Department of Regional Development and the Department of European Funds of the Marshal’s Office of the Lower Silesian Voivodeship, the local personnel at the level of regional authorities. Strong animosities government of the city of Wałbrzych, the Institute of Territorial Development, the between the political systems and the elites associated with the Wroclaw Regional Development Agency, the Wroclaw Technology Park, the Wroclaw Centre for Technology Transfer, the Wroclaw Research Centre EIT+, the Wałbrzych Special Economic Zone “Invest-Park” and the Nutribiomed Cluster. 2Wrocław Research Centre EIT+

85 Miscellanea Geographica – Regional Studies on Development Vol. 21 • No. 2 • 2017 • pp. 84-88 • ISSN: 2084-6118 • DOI: 10.1515/mgrsd-2017-0026

four smaller voivodeships that existed in Lower Silesia until 1999 procedures related to the construction of the S3 express road as – Jelenia Góra, Legnica, Wałbrzych and Wrocław – are often well as the lack of modernization of the railway network (which visible. It can be stated that political cooperation is significantly despite having the greatest density in Poland is not competitive stronger within particular sub-regions rather than the entire in comparison to vehicle transport in many places) deepens the region. There were many respondents who had the opinion that spatial isolation of the Kłodzko Valley and limits the possibilities the region is divided into Wrocław and the rest of the voivodeship; for the development of commercial exchange and increased a lack of understanding and acceptance of policies based on the tourism from the Czech Republic. The Sudetes mountains still concept of the polarization-diffusion model was also mentioned constitute a physical barrier to the development of the southern (see Churski 2014). In many places self-governance at the local part of Lower Silesia. level brought about positive effects thanks to the tools with which Another risk for the long-term perspective could be the local governments have been equipped in recent times (Integrated termination of the Special Economic Zones’ activities in the Lower Territorial Investments, Urban Revitalization Programmes), but Silesian Voivodeship. As indicated by the studies conducted by undoubtedly the result of actions undertaken at the regional level Ernst and Young (2011), preferences and tax exemptions (and the or the governmental level are also extremely significant for the length of their application) are among the key factors in deciding peripheral areas of the Lower Silesian Voivodeship. Establishing about the location of companies in these areas. In 2011, when a the Wałbrzych Special Economic Zone “Invest-Park” in 1997 decision about extending the activities of SEZs until 2026 was helped the region of Wałbrzych to recover from its economic not made, more than a half of the investors who were conducting collapse, however, new sub-zones being opened in relatively activities in these zones declared that they were not planning to well-developed urban agglomerations, has weakened the implement new investment in SEZs if they were to function only competitiveness of this sub-zone. until 2020. Therefore, the question as to whether investors will Another weakness of the region is the low level of trust and remain in the region if SEZs cease to exist in their current form cooperation between representatives of the sectors of science or whether they will make decisions about relocating activities, and business as well as other entities of the regional innovation remains relevant. system (underdeveloped quadruple helix). The number of clusters functioning in the region does not fully reflect the real cooperation Conclusions and recommendations for regional policy potential, as numerous institutions were established as a result As can be concluded from the conducted studies, the of external funding (usually from the EU) and when the funding is development trajectory of Lower Silesia was exceptionally restricted or ceases, there are justifiable concerns that many of beneficial after the political changes at the beginning ofthe them will terminate their activities.3 twenty-first century and after Poland joined the European Union. Lower Silesia took second position in the regions of Poland Lower Silesia’s Development opportunities concerning development parameters. The region turned out to be Among the external factors determining the development relatively resistant to disturbances in the development processes policy for the region in the coming years, the adoption of the that initially resulted from the financial crisis, and then from the smart specialization concept is seen as the most important when economic crisis that affected the European Union and its member creating regional innovation policies (see Foray 2015; Dziemianowicz states after 2007 (Gawlikowska-Hueckel & Szlachta 2016). & Peszat 2014). The regional innovation policy that is currently We may say that the very dynamic social and economic implemented in the Lower Silesian Voivodeship allows for a expansion of Lower Silesia in recent decades has mostly greater concentration of funds (also EU funds) in areas that are resulted from using simple reserves such as the advantages strategic for the region, but most of all it creates an opportunity of its geographical location (excellent transport accessibility to enter into more permanent relations in the fields of science in the European context), the privileges of having Special and economy, which together, as has been indicated by various Economic Zones, a good economic situation within world copper scientific, economic and political communities, are essential for production, the removal of numerous barriers and limitations the development of the region.4 to the development of the economy thanks to the political Another factor that is very important for the development of transformation, as well as cheap and relatively well-educated Lower Silesia is cross-border cooperation. Good neighbourhood labour force resources. The first stage of the local government relations, particularly with Germany, already bring positive reform was an essential component in the dynamic social and effects both at the local and regional level. Greater openness economic development of Lower Silesia, as a result of which for cooperation with the Czech Republic with which relations are empowered local governments were established at the beginning good but not sufficiently taken advantage of, would certainly bring of the 1990s. Numerous cities and municipalities took advantage real benefits for the entire region (currently cooperation occurs of the possibility for creating high quality, efficiently implemented mostly in border municipalities). local strategies; an excellent example of which is the city of Wrocław and the municipalities near to Wrocław. Also, the Lower Silesia’s development barriers possibility of taking advantage of significant funds (due to their A significant limitation in the development of the Lower Silesian scale) within the European Structural and Investment Funds after Voivodeship is the lack of appropriate transport infrastructure 2004 and mostly managed at the regional level, also favoured the that connects the south of the region with Wrocław. Protracted economic expansion. As indicated in the literature on the subject, Poland and its 3Obviously, positive examples can be pointed out of such organizations that have strongest regions have already fallen into the middle income trap functioned for many years in Lower Silesia, members of which see real benefits in (Geodecki et. al., 2013). This means it is unable to further improve participating in clusters and who declare that they will maintain cooperation even after its economic position within the European Union, or the world, the termination of external funding. An example of such an organisation in the region is the Nutribiomed cluster (combining nearly 70 entities), which is the only cluster from the based on traditional functions and development potentials. Lower Lower Silesia Voivodeship to be entered in the list of national key clusters. Silesia is one of the Polish regions that is most exposed to such 4In the Lower Silesian Voivodeship six areas of smart specialisations were pointed fundamental re-evaluations of its position. This results from the out: the chemical and pharmaceutical industry, spatial mobility, high quality food, following: the exhaustion of simple development reserves, the natural and secondary raw materials, production of machines and devices, material perspective of a fundamental limitation in the scale and scope processing, and information and communication technologies (the Marshall’s Office of of intervention by the European Structural and Investment Funds the Lower Silesian Voivodeship, 2015).

86 Miscellanea Geographica – Regional Studies on Development Vol. 21 • No. 2 • 2017 • pp. 84-88 • ISSN: 2084-6118 • DOI: 10.1515/mgrsd-2017-0026 in Lower Silesia after 2020, the dependence of the region’s Wrocław sub-region and Legnica sub-region, and the sub- development trajectory on the economic situation of the copper regions of Jelenia Góra and Wałbrzych increase, which is also raw material industry, and, despite an extension for another ten as a result of the negative course of migration and demographic years (i.e. until the 31st of December 2026) the periodicity of processes. Some areas of the Sudetes, exposed to further solutions concerning SEZs, amongst other things. losses of potential and population migration loss, as well as a With this background, several necessary elements of public deepening in the deficiency of modern development functions, policy may be indicated, including regional policy, which also are particularly affected. Therefore, the third element should conditions the maintenance of the voivodeship’s beneficial be a greater emphasis on a more efficient approach to matters development trajectory into the coming decades. The first element concerning the internal coherence of the voivodeship, also at the is to strengthen the metropolitan functions of the functional area of local scale, and based on modern development factors. Wrocław. Wrocław is currently the second or third centre in Poland Finally, shaping Lower Silesia’s economic specialization according to economic power. It has very beneficial parameters (smart specialization) requires special diligence. It should within the R&D sector, the strength of an academic centre, the involve expanding the economic portfolio in order to decrease development its cultural sectors, public services, its finance the dependence on the raw materials industry as well as to sector, its business-related sector, and events and initiatives that develop science-intensive industries based on technological and are of global and European significance, all of which must be academic potential. In the literature, the significance of using maintained. An increase in the impact of this metropolitan area on the so-called wild cards or black swans – which are suddenly various spatial scales, including the voivodeship, macro-regional emerging opportunities for development – is pointed out and international scales, is essential. (Taleb 2007). Lower Silesia is one of only a few regions in Poland The second element is to build an efficient network where such possibilities should occur, however their use requires for improving the development processes within the entire the existence of the relevant structures. voivodeship. In comparison to the high level of social and In general, it may be stated that qualitative and quantitative economic development of Lower Silesia, parameters concerning changes within the innovation processes that occurred in Poland, social capital are relatively low. The quality of cooperation allowed for a beneficial development trajectory for Lower Silesia. between the various stakeholders in development processes However, they require development and better configuration to requires fundamental improvement. The previously mentioned effectively avoid the trap of the average development level. internal regionalization of Lower Silesia does not favour complex thinking concerning development on the scale of the entire Acknowledgements voivodeship; therefore, consistent strengthening of skills and The research leading to this paper has received funding the will to cooperate, is necessary, not only on the scale of the from the National Science Centre, Poland under grant: functional area of Wrocław’s Integrated Territorial Investments, “Changing innovation processes models: A chance to break out but on the scale of the entire voivodeship, and in the spirit of the of path dependency for less developed regions” (grant n° DEC- quadruple helix. 2014/13/B/HS5/03612). The grant was awarded to the University An analysis of the territorial regularities of Lower Silesia’s of Warsaw, Faculty of Geography and Regional Studies. social and economic development indicates that the maintenance of a dual structure is still visible as discrepancies between the

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